Galves and Patil argue that between electric vehicles (EVs), such as Tesla's Model S sedan, and oldfangled internal combustion engine cars, the fight is not fair: EVs win in a rout.

"We believe there are many inherent advantages to Electric Vehicles, and the success of the Model S (Tesla's first fully-developed vehicle) goes a long way to proving that," the analysts write, making the case for an "outperform" rating and a target price of $325 per share (it's trading at $262 on Thursday).

They go on to hit all the right notes about Tesla's future. In particular, they zero in on how Tesla's choice of battery technology, when the company was first launching, has paid off handsomely for the carmaker — even though it wasn't really a choice at the time.

The battery choice that wasn't a choice

A Tesla battery is essentially thousands of laptop batteries all wired together. When the company was developing its first vehicle, the Roadster, it wanted to deliver range that was comparable to gas-engine cars. Auto-specific batteries big enough to achieve that objective didn't exist yet, so Tesla went the lithium-ion laptop route. As Galves and Patil point out, the major automakers chose the big battery option, which thus far hasn't yielded range on par with what Tesla has managed.

The Tesla Roadster

Telsa Motors

That sounds great, but there's a critical problem with Tesla's approach. It demands a huge number of battery cells. In fact, industry observers have speculated that if Tesla does succeed in building 500,000 cars a year by 2020, there won't be enough lithium-ion cells on Earth to satisfy its needs.

Musk knows this, and that's why Tesla is planning to spend $5 billion to construct at least one and probably more Gigafactories, to supply the company's voracious battery requirements and to drive down the cost of lithium-ion cells so Tesla can build cheaper vehicles than it currently does.

The Gigafactory will be critical for Tesla's future.

Tesla Motors

Tesla Stands Alone

So far, so good, in terms of breaking down Tesla's business.

But Galves and Patil offer another piece of extremely useful analysis: They call competition from the world's major carmakers a "Red Herring."

"[T]hese companies MUST put the vast majority of their focus and resources into meeting tightening emission regulations and competing in the ICE [internal combustion engine] business, which almost certainly will remain 90%+ of their business well into the 2020s," they write.

Let's be clear about what this means: Tesla has the blue-sky EV business all to itself.

It can be a lonely road for an all-electric luxury sedan.

REUTERS/Noah Berger

The gas engine has been continuously improved for more than a century. The auto industry has invested so much in this core technology that it has very little incentive to disrupt it by expanding EV efforts. Besides the Model S, there are few EVs in the market, and they aren't selling particularly well (but they aren't being discontinued, either). Besides Tesla, most of the other electric-car startups have faded away.

It's not clear that Musk is all that happy to be running the last EV startup standing, even if Tesla is standing very, very tall. This could be why Tesla decided to give away its patents, an unprecedented action in the auto industry. Musk hopes to encourage new companies to follow quite literally in Tesla footsteps.

Is Tesla growing up?

Tesla is in a weird place right now. All the naysayers have been silenced, and the company couldn't be riding higher, even if it's still working out the quality control kinks with its products. Anyone who thought Tesla was going to be DeLorean 2.0 now looks foolish.

The Gigafactory likely will become a reality, at least in Nevada and perhaps in other states. Tesla's next car, the Model X, is due out next year. The Model 3, a true mass-market EV, should follow.

Tesla's market cap is $32 billion. Everyone thinks Elon Musk is the most important American entrepreneur since Henry Ford. Actually, he could be wildly more important than Henry Ford, if with his other company, SpaceX, he can mount a private mission to Mars.

Next stop: Mars

However, it's going to take decades for the electric car to assume what Galves and Patil contend is its rightful place in the transportation landscape.

And that's if a new disruptive technology doesn't appear. This could happen on the gas-engine front. The efficiency of old-school motors could be radically improved. If this happens, EVs could lose a key competitive advantage. You never need to think about filling them up; you just plug them in at night. An inexpensive gas-powered car you drive to the pump once a month or less could be very attractive.

Other propulsion technologies are also out there. Toyota and Tesla recently ended a partnership, with Toyota deciding to focus on fuel-cell applications (fuel cells use hydrogen to generate energy). Musk doesn't seem to consider fuel cells much of a threat, but the fact remains that Tesla is wholly committed to a 100% electric strategy — so much so that the company wants to rapidly expand its Supercharger Network in the U.S., Europe, and China. There will be no pivots.

Tesla will need some help to save the entire world

So the bottom line is you have Tesla all by itself. It's monumentally successful. It's selling hundreds of thousands of cars each year. It's defied all the odds and become the first new mass-market car company to make a go of it in a century.

And it captures less than 1% of the global auto market.

We can consider this, as Galves and Patil have, and conclude that Tesla looks like a pretty good investment. This proves Tesla may finally be outgrowing its difficult early stage and maturing as a company (although to convince yourself of that you might want to see the stock cool off a bit).

Of course, you would also have to conclude that Tesla isn't going to change the world — although it could profoundly affect one part of it. And that's probably a good thing, as it was a lot to ask of one company, even if it did shape Tesla's story from the beginning.